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| Here’s your daily business briefing. - 📉 P&G sales disappoint as slowing prices
- 🔬 Deep Dive: Biotech M&A: $100B gain, more ahead
- 🎬 Netflix beats earnings, 16% more subscribers
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Procter & Gamble disclosed mixed quarterly results, surpassing earnings per share expectations at $1.52 compared to the projected $1.41, yet falling short on revenue at $20.2B versus the anticipated $20.41B by Wall Street. Despite flat quarterly volume for the second consecutive quarter, P&G anticipates a return to volume growth in fiscal 2024. More: - The company's quarterly net income attributable increased to $3.75B, or $1.52 per share, from $3.4B, or $1.37 per share, the previous year.
- For the quarter, P&G's three divisions had volume growth: fabric and home care (+1%), grooming (+2%), and beauty (+1%).
- Conversely, the healthcare and baby, feminine, and family care divisions experienced a declining volume, attributed to increased prices and a less severe cold and flu season.
- For the entire year, P&G anticipates core net earnings per share growth of 10% to 11%, while sales growth is anticipated to reach 2% to 4% in 2024.
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| 2 | | 
What the numbers say: In 2023, the biotech industry saw 46 deals worth over $100B, marking the highest level since 2019. The top 20 pharmaceutical companies collectively possess over $110B in cash and equivalents, accounting for over a third of the U.S. small and midcap biotech sector's market value. Relevance: The surge in deal activity reflects a reversal in the downturn of biotech stocks, with the Russell 2000 Index Biotechnology Subsector rising approximately 60% since October. Pharmaceutical companies are seeking mergers and acquisitions to address patent expirations and enhance their drug pipelines, mainly targeting immunology, obesity, and cancer, as they strive to replace $200B in sales over the next decade. More data: Areas like immunology, obesity, and cancer are attracting M&A attention, with significant acquisitions by companies such as Novartis, Sanofi, and Johnson & Johnson. Strong stock performance among firms developing innovative treatments reflects the market's demand for therapies to revolutionize medical practices. | | | |
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| 3 | | Netflix surpassed both earnings and revenue estimates for the quarter, with a 16% increase in subscribers from the previous year, reaching a total of 269.6 million. Additionally, the company revealed plans to discontinue reporting paid memberships starting next year. More: - The company stated that Netflix now prioritizes revenue and operating margin over subscriber growth as its primary financial metrics.
- First-quarter earnings per share stood at $5.28, exceeding the expected $4.52, while revenue for the quarter totaled $9.37B, surpassing the anticipated $9.28B.
- Netflix's second-quarter revenue forecast of $9.49B missed Wall Street's estimated $9.54B, with lower paid net additions expected due to seasonal patterns.
- Netflix's stock fell by 4% in extended trading after the earnings report, but as of Thursday morning, it had risen by 27% YTD and approximately 85% over the past year.
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| 4 | | Wayfair will launch its inaugural brick-and-mortar store at Edens Plaza in Wilmette, Illinois, covering 150,000 square feet and featuring an onsite restaurant named "The Porch," mirroring Ikea's retail model. This shift to physical stores coincides with Wayfair's efforts to address slow sales and heightened advertising expenditures. More: - This marks Wayfair's flagship brand's first venture into physical retail, despite previous test store trials with other brands like Joss & Main and AllModern.
- Wayfair announced a 1.8% decrease in yearly sales in 2023, amounting to $12B, and a net loss for the same period.
- Following a round of layoffs in 2023, 1,650 employees, or 13% of the global workforce, were laid off in January.
- Wayfair's CEO, Niraj Shah, ascribed the company's problems to hiring too many people during the pandemic-induced demand spike that doubled sales to $18B.
- Analysts anticipate that the new store could increase Wayfair's sales and visibility, potentially paving the way for broader physical expansion if it proves successful.
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| 5 | | American Express surpassed first-quarter profit projections, soaring profits by 31% to $2.44B, equivalent to $3.33 per share. Consumer spending in the U.S. for AmEx surged by 8% YoY, alongside a 1% increase in spending by small and medium enterprises (SMEs). More: - AmEx kept its 2024 profit projection of $12.65 to $13.15 per share and its estimates for revenue growth of 9% to 11%.
- AmEx's stock increased 3.4% to $224.86 after the company released its earnings.
- On its investor day on April 30, the company is anticipated to provide specifics about its strategy to increase its attractiveness to small businesses.
- Furthermore, AmEx will also discuss strategies for premium consumers, small businesses, and revenue opportunities tied to Gen Z and millennials.
- Despite Capital One's acquisition of Discover, AmEx remains confident in its strategy, asserting that changes in the competitive landscape won't impact it.
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| 6 | | Nissan Motor Co. announced a full-year operating profit of $3.4B, marking a 15% decrease from its February forecast, with sales totaling 3.44 million units, below the projected 3.55 million units. The sales decline is attributed to factors like an aging lineup, a lack of hybrid options in North America, increased competition in China, and logistical challenges, including a Japanese earthquake. More: - The 12 months that ended March 31st had a net income of $2.4B, less than the $2.5B prediction issued in February.
- CEO Makoto Uchida stated that the U.S. market has dramatically affected Nissan's performance, namely the rising demand for hybrid vehicles.
- Nissan announced its intentions to sell an extra 1 million vehicles by 2027 and revealed a collaboration with Honda to advance EV technology.
- Analysts have expressed doubts about Nissan's capacity to meet its objectives, citing lower sales volumes and the implementation of several cost-saving measures.
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- Apple has pulled WhatsApp and Threads from its app store in China, complying with a directive from the country's internet regulator citing national security worries.
- Hyundai announced on Thursday that it halted advertising on X (formerly known as Twitter) after one of its ads allegedly appeared next to an antisemitic and pro-Hitler post on the platform.
- One-year-old French AI start-up, Mistral, is in discussions with investors to secure $532M at a valuation of $5.3B, with multiple investors seeing it as Europe's counterpart to OpenAI.
- Paramount Global's shares jumped over 10% on Friday on news of discussions between Sony Pictures Entertainment and Apollo Global Management for a joint acquisition.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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